China Benzene Import Volume to Hit New High in 2024
Starting in the second half of 2024, there was a noticeable increase in the import of benzene. According to GACC, China’s cumulative benzene imports from January to September 2024 reached 2,927.8kt, up 19.91% YOY. The import volume is expected to remain high in Q4, continuously impacting the domestic benzene market.
From January to September 2024, China’s benzene import volume continued to grow, especially in the second half of the year, impacting the domestic benzene market. The cumulative import volume reached 2,927.8kt, up 19.91% YOY. Especially after Q3, the foreign supply increased significantly, combined with a weaker domestic supply-demand situation, inventories at East China’s ports continued to rise. The low-cost supply also put downward pressure on benzene prices. As of October 25, the reference spot price of benzene in East China was RMB 7,300-7,360/mt, with an average price decline of RMB 2,270/mt from late June, decreased by 23.65%.
The import volume and market price trends in 2024 indicate that from January to June, the average monthly import of benzene was only 290kt, and the insufficient import supply was one of the key factors supporting the continuous rise in benzene prices in the first half of the year. Starting from July, as demand from Europe and America weakened and there was no arbitrage opportunity between Asia and America, the benzene import into China increased significantly. According to GACC, the average monthly import volume reached 390kt from July to September, an increase of 100kt compared to the first half of the year. The benzene prices started to fall from June.
After the third quarter, the East China ports entered a phase of high inventory, with port stocks rising from 17kt in late June to the current 108kt, which contributed to the decline in benzene prices. Comparing port inventory data over the past two years, from January to October 2024, the benzene inventory in East China ports was significantly lower than in the same period last year for most of the time, which is closely related to the continuously low import volume in the first half of 2024. However, with the continuous increase in import supply and tepid demand from July, port inventories began to accumulate gradually. Especially after October, with the intensive arrival of goods and average demand, inventories increased rapidly, further dragging down benzene prices to new lows.
There was still no arbitrage opportunity between Asia and America, so the import of benzene is expected to stay high in Q4. SCI reckons that the total import of benzene in 2024 will reach about 4,120kt, up 22.6% YOY. The projected import volume for Q4 is 1,190kt, up 29% YOY, which will continue to exert negative pressure on the benzene market. Compared to the past five years, the import volume of benzene has shown an increasing trend annually. However, with the synchronous increase in benzene consumption, the benzene import dependence degree has remained between 12%-14%. In terms of price impact, influenced by the proactive demand in Europe and America, the overseas market provided support for domestic benzene prices in the first half of 2024. In the second half of 2024, as European and American demand weakened, the increase in imports to China had a bearish impact on the domestic benzene market.
The sustained high expectation of benzene imports in Q4 has impacted the sentiment of players. Coupled with the rapidly increasing inventory in October, the abundance of import supply may continue to put pressure on the domestic benzene market, limiting market recovery. At the same time, some end demand will enter the off-season in Q4. The benzene market will continue to face a bearish outlook in the short term, with the benzene prices likely to continue a downward trend. As the year-end holidays approach, a market turning point may emerge after December.
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